Equilibrium Analysis in Behavioral One-Sector Growth Models 2 April 2023 Daron Acemoglu and Martin Kaae JensenRich behavioral biases, mistakes and limits on rational decision-making are often thought to make equilibrium analysis much more intractable. We establish that this is not the case in the context of one-sector growth models such as Ramsey-Cass-Koopmans or Bewley-Aiyagari models.
Follow the Money 2 April 2023 Marco GrotteriaI study, both empirically and theoretically, the economic and financial consequences of corporate lobbying. Firms lobby politicians to increase their share of government contracts, but political competition creates firm-level risk, inflating their cost of capital and reducing their incentive to invest in research and development (R&D).
Security Design in Non-Exclusive Markets with Asymmetric Information 29 March 2023 Vladimir Asriyan and Victoria VanascoWe study the problem of a seller (e.g., a bank) who is privately informed about the quality of her asset and wants to exploit gains from trade with uninformed buyers (e.g., investors) by issuing securities backed by her asset cash flows.
Financial Cycles with Heterogeneous Intermediaries 29 March 2023 Nuno Coimbra and Hélène ReyWe develop a dynamic macroeconomic model with heterogeneous financial intermediaries and endogenous entry. Time-varying endogenous macroeconomic risk arises from the risk-shifting behaviour of the cross-section of financial intermediaries.
House Price Dynamics, Optimal LTV Limits and the Liquidity Trap 29 March 2023 Andrea Ferrero, Richard Harrison, and Benjamin NelsonThis paper studies the optimal design of a macro-prudential instrument, a loan-to-value (LTV) limit, and its implications for monetary policy in a model with nominal rigidities and financial frictions.
Using Disasters to Estimate the Impact of Uncertainty 20 March 2023 Scott R Baker, Nicholas Bloom, and Stephen TerryUncertainty rises in recessions and falls in booms. But what is the causal relationship? We construct cross-country panel data on stock market returns to proxy for first- and second-moment shocks and instrument these with natural disasters, terrorist attacks, and political shocks.
Price Discrimination in International Airline Markets 20 March 2023 Gaurab Aryal, Charles Murry, and Jonathan W. WilliamsWe develop a model of inter-temporal and intra-temporal price discrimination by monopoly airlines to study the ability of different discriminatory pricing mechanisms to increase efficiency and the associated distributional implications.
